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Bank Reconciliation
The following data were accumulated for use in reconciling the bank account of Creative Design Co. for August 20Y6:
Cash balance according to the company's records at August 31, $18,680.Cash balance according to the bank statement at August 31, $19,820.Checks outstanding, $3,790.Deposit in transit, not recorded by bank, $3,040.A check for $270 in payment of an account was erroneously recorded in the check register as $720.Bank debit memo for service charges, $60.
Problem a. Prepare a bank reconciliation
Problem b. If the balance sheet were prepared for Creative Design Co. on August 31, what amount should be reported for cash?
Problem c. Must a bank reconciliation always balance (reconcile)?
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